How long does it take a tankless water heater to pay for itself?

Beginner Info, Tankless Water Heater

how long does it takes for a tankless water heater to payoff for itself
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There has been a lot of hue and cry about tankless water heaters having less maintenance cost and paying for themselves in the long-run.

But, the question is, how long?

And, most importantly, will these tankless heaters save you some REAL money in the long-run?

So, in order to dive deep into the discussion please allow me to share with you some figures that might blow up your mind.

According to the Department of Energy, the average American household spends $2,060 annually on energy bills. 

And, you know what, 13 percent of that cost is for heating water.

In monetary terms, it would be roughly around $268 dollars each year to heat the water for those hot showers, dishwashers, washing machines, mop buckets, and good hand scrubbings.


In the above costing, I’ve not included the additional $70.39 average monthly ($845 annually) bill for the water itself.

Do you know average Atlanta water bill is at $1100 per year.

Many of you might be wondering why am sharing with you these numbers, right?

Frankly speaking, all the aforementioned costs add for most families and as a result, most of the house owners across the United States look for ways to save money on their water heating costs.

How helpful is a tankless water heater when it comes to saving energy bills?

To be honest, it’s been more than a decade for tankless water heaters to be trustworthy substitutes for tank-styled traditional water heaters.

Needless to say, tankless heaters have more advantages as compared to conventional heaters.

These little beasts are also popularly known as on-demand, instantaneous water heaters, and what NOT.

The reason why they are called “on-demand” water heaters has to do with their ability to serve endless hot water instantly.

That is, any tankless water heater heats water when only it is needed which is quite different when compared to a tank-styled water heater that is meant to store hot water in a storage tank.

Since a tankless hot water heater doesn’t store even a few gallons of hot water, so the standby heat loss is almost minimal.

And, as a result, you can expect them to be more energy-efficient leading to saving a good lump on electricity bills in the long-run.

Let’s dig a little bit more into the efficiency of a tankless hot water heater.

For the homes in the United States that use 41 gallons or less of hot water on a day-to-day basis, a tankless water heater from premium brands such as Rinnai, Rheem, Noritz, EcoSmart can be up to 34 percent more energy-efficient as compared to their conventional counterparts concludes the Department of Energy.

But, it doesn’t mean that they aren’t energy efficient for the homes that use a high amount of hot water.

Even though your household hot water requirement is somewhere around 85 to 90 gallons per day, you can expect a tankless water heater like this one to be up to 14 percent more energy-efficient as compared to traditional counterparts.

So, you might be inquisitive to know, how well these high-efficiency coverts in terms of monetary benefits, right?

In simple words, a high-quality properly maintained tankless gas water heater can save you up to $100 annually.

On the other hand, an electric version of a tankless heater can save you up to $44 annually.

All these data are relative and NOT absolute.

In fact, the number can be even higher if you’re properly maintaining your tankless heater.

How costly is Energy-Efficiency?

It is really important for first-time buyers to know that you need to pay a price for energy efficiency.

Many of you would be wondering what am I saying, right?

Unfortunately, the energy savings of a tankless water heater comes with higher front costs, both for purchase and installation.

study by Consumer Reports found some low-end tankless water heaters priced comparably to storage water heaters, but others cost as much as $550 more.

On top of it, you’ll find a tankless water heater more complex to install as compared to a tank-styled heater.

The electric tankless heaters are easier to install as compared to gas tankless heaters.

In fact, if you’re planning to buy a GAS tankless heater irrespective of whether it’s propane tankless or natural gas tankless, the probability is very high that you might be requiring some additional venting and larger diameter gas supply lines.

On top of it, if you’re planning to buy a whole house tankless water heater, then let me tell you, it will draw a huge amount of power that might force you to upgrade your electrical system to nothing less than 200 amps.

In simple words, up-gradation involves additional costs that you also need to consider when you’re planning to buy a tankless heater.

In the Consumer Reports study, these complexities led to installation costs that were from $200 to $700 higher.

An electrical system upgrade, if needed, could add a lot to these costs.

Well, I’m not denying the fact that tankless water heaters can payback for these additional expenses on their own in the long-run, but the question is, how long?

If facts and data are to be believed then a gas tankless water heater would roughly take two decades or so to become breakeven.

On the other hand, the breakeven period for an electric tankless water heater is somewhere around 12 to 20 years.

The good news is, tankless water heaters are known to last longer, in fact, more than 2 decades in most cases considering the unit is properly maintained.

However, the wait time for the saving is huge which is definitely something bothersome, isn’t it?

Benefits of a tankless water heater that makes it a preferred choice…

Let’s have a quick look at some of the benefits other than the energy-efficiency that makes a tankless water heater a preferred choice for sure.

Equipped With Advanced And Innovative Technology

Yes, you heard it, RIGHT!

Most of the tankless hot water heaters are equipped with advanced and innovative technology making them more convenient, user-friendly, and performance-driven for end-users’.

For example, tankless models that come with recirculation technology can reduce the wait time drastically.

Space Savings

Well, if you’ve got a scarcity of space in your home, then you can opt for a tankless water heater as most of the models especially the electric ones are small, compact, and sleek designed in such a manner that they can be installed in small spaces as well as non-conventional ones including attics, and closet.

You can also opt for a wall-mounted tankless water heater in case, you want to free the floor space and use it for some other purposes.

Furthermore, you can also opt for an outdoor tankless water heater in case, you don’t want to have it inside.

Nonetheless, as per my requirements, these indoor tankless heaters are more valuable as compared to others.

Similarly, if you’re looking for a hot water heater exclusive for a particular sink, or any other fixture that is far away from the main heating unit, then don’t hesitate in trying under-sink tankless heaters.

The manufacturers of tankless water heaters give you a variety of options including commercial variants as well.

Longer Life

It goes without saying that most tankless heater brands boast about a longer lifespan.

In fact, a tankless water heater like this one can last almost twice as long as a conventional counterpart.

A typical conventional water heater can be under warranty for 5 to 6 years and can last for 8 to 12 years.

On the other hand, a tankless water heater may be under warranty for 10 years and can last up to 25 years if NOT MORE.

Another well-hidden fact about a tankless water heater is that most of its parts are replaceable.

What actually it means technically is, problems that might end the life of a storage water heater may need only a simple repair job on a tankless heater.

Of course, it all started from endless supply, isn’t it?

Well, if you’ve done the sizing of your tankless hot water heater perfectly, then I can assure you that it will provide you an endless supply of hot water not for years but for decades.

Sizing has to do a lot with the flow rate, temperature rise, and location of operation.

I’ve written a comprehensive article on sizing a tankless water heater and would request you to go through it in case, you’re not sure how to perfectly size a tankless water heater.

Wrapping Up

First and foremost, I would like to thank you for being with us till the end.

Secondly, I would like to bring to your notice that I along with my core team have put loads and loads of effort into coming up with this idiosyncratic superlative piece of information.

And, in case, you liked our efforts and want to appreciate us, then please feel free to share this piece of information with like-minded people.

So, Is a tankless water heater right for you?

Definitely, it’s a great investment worth your time and money.

Don’t get scared from investing in this superlative product which if given time will pay off for itself.

What more you expect, huh?

I totally agree that it takes a long-time for a tankless water heater to payoff for itself but the thing that it is capable of paying off for itself makes me feel more excited about this little beast.

Rest assured, your investment would be in the right hand if you’re choosing the tankless heater brand carefully and after doing a good amount of research.

It’s a “value for money” product that is clearly depicted in a surge in its demand across the globe including the United States.

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